Bedford Basin
Mortgage broker or bank?
The cost question is answered next door. This is the decision question, including the cases where the answer is your own bank.
Should I use a mortgage broker or go to my bank?
Go to your bank when the file is straightforward and the rate it offers is competitive — it sometimes is, especially where it is protecting a wider relationship. Use a broker when anything about the file is unusual, when you want several lenders considered on one credit check, or when you have already been declined. On a standard residential mortgage the broker costs you nothing, so the question is which route funds your file on better terms — not which is cheaper to use.
What actually differs
Both routes end in a mortgage from a lender. What changes is how many lenders looked at the file, who is obliged to tell you what, and who carries it when something goes wrong.
| A bank or credit union branch | A mortgage brokerage | |
|---|---|---|
| Lenders considered | One — that institution's own products | Banks, credit unions, monoline lenders that deal only through brokers, and alternative and private lenders |
| Who pays | Salary and incentives, paid by the institution | The lender pays the brokerage on funding; no borrower fee on standard residential mortgages |
| Credit inquiries | One per institution you apply to | One, presented to each lender considered |
| Compensation disclosure | None required | Form 1, signed before any services are provided |
| Fee timing, where a fee applies | n/a | Regulated: a brokerage must not charge or collect a fee from a borrower until the lender has confirmed funding in writing, the borrower has accepted the commitment in writing, and the borrower has a copy of the signed commitment |
| If declined | The application ends there | The file moves to another lender without starting over |
| Stress test | Federally regulated banks apply the greater of the contract rate plus 2% and 5.25%; credit unions set their own | Same rules — but the broker can place the file where the rule helps |
The single most useful thing either route does is tell you early that the answer is no. A file that is going to be declined is better declined in week one than in the last three days of a financing condition.
Go deeper
The detail, if you want it
Three times your own bank is the better answer
Said plainly, because a comparison that never concedes anything is not a comparison.
- The Nova Scotia First-time Homebuyers Program. It runs only through Atlantic Central and participating Nova Scotia credit unions. No broker can originate it. If you fit its caps and the arithmetic beats an insured mortgage, go to a participating credit union directly. The two programs compared →
- A relationship your bank is protecting. Business accounts, investments, a long history — banks do discount to keep the whole relationship, and that discount is not available through the broker channel. Get the offer in writing and compare it properly.
- A straight renewal you are happy with. If your current lender's renewal offer is competitive and nothing about your situation has changed, signing it costs nothing and takes a day. Shop it first — but if it holds up, it holds up. What to check at renewal →
And a fourth, honestly: if you have one simple file, a strong income, excellent credit and time to walk into three branches yourself, you can do what a broker does. Most people have neither the time nor three afternoons.
When a broker changes the outcome
Not the rate, usually. The outcome.
- Self-employed, commissioned or seasonal income. Lenders read two years of returns very differently from one another, and the one your branch uses may not be the one that reads yours best. How self-employed income qualifies →
- You have been declined once. A decline at one lender is not a decline everywhere, and the reason usually points at which lender fits. What to do after a no →
- The property is the problem. Rural, on a well, wood-heated, a mini-home, on acreage — lender appetite varies enormously and branch staff rarely know which lender takes what. The property conditions that decide it →
- The terms matter more than the rate. Prepayment privileges, portability, and above all how the penalty is calculated. Two mortgages at the same rate can differ by thousands if you leave early. How the penalty is calculated →
- Timing. A firm commitment inside a financing condition, on a file several lenders are looking at, is the ordinary case for a broker and an awkward one for a single branch.
How to check whoever you end up with
Whichever route you take, three things are worth doing before you sign anything.
- Verify the licence. Every Nova Scotia broker and brokerage appears on the provincial public register. Riley Oickle holds associate mortgage broker licence 3001134 with Indi, The Independent Mortgage Company Ltd., brokerage licence 3000688.
- Read the penalty clause before the rate. Ask which comparison rate the lender uses in an interest rate differential calculation. It is the single largest variable cost in a mortgage contract and almost nobody asks.
- Get the compensation position in writing. From a brokerage that is Form 1, and it comes before any work. From a branch, ask directly whether the rate quoted is the best available to you and what it is conditional on.
Why a broker
Licensed, independent, paid by the lender
- Licensed in Nova Scotia Associate broker 3001134, verifiable on the provincial register
- $0 broker fee On a standard residential mortgage the lender pays, not you
- Banks, credit unions, monolines One application, placed with the lender that reads your file best
- Every part of the province Bedford office, remote process — Yarmouth to Sydney, the same way
Questions people ask
Should I use a mortgage broker or my bank?
Use your bank when your file is straightforward, you value the existing relationship and the rate it offers is competitive — and it sometimes is, particularly where a bank is protecting a whole banking relationship. Use a broker when the file has anything unusual in it, when you want more than one lender considered without applying separately to each, or when you have been declined once. On a standard residential mortgage the broker route costs the borrower nothing either way, so the real question is which one gets your file funded on better terms.
Is a broker rate actually lower than a bank rate?
Sometimes, and not always. Broker-channel rates are set by the same lenders, and a bank branch with discretion can match or beat them on a strong file. What a broker reliably changes is the number of lenders considered and the fit of the product — the penalty clause, the prepayment privileges, whether a switch at renewal will be easy. On a mortgage that runs five years, those are often worth more than a few basis points.
Does applying through a broker hurt my credit score?
A broker pulls your credit once and presents that single report to the lenders considered. Applying separately to four banks means four inquiries. That is one of the quieter arguments for the broker route, and it matters most for the borrowers whose scores can least afford it.
Can a broker get me the Nova Scotia first-time buyer programs?
Not the Nova Scotia First-time Homebuyers Program — it is delivered by Atlantic Central and participating Nova Scotia credit unions, and a broker cannot originate it. That is a genuine case for going direct to a participating credit union. The Down Payment Assistance Program works alongside an insured pre-approval, which a broker can arrange. Any broker who tells you the provincial pilot runs through them is wrong.
What does a broker have to disclose that a bank does not?
A Nova Scotia brokerage must give you Form 1 — Mortgage Brokerage Disclosure, and you must sign it, before it provides any services: who it acts for and how it is paid, in writing, before any work is done. A bank employee selling that bank's own mortgages has no equivalent obligation, because there is no question about whose product they are offering.
Still unsure? Ask me directly.
If your question isn't here, your situation is probably specific. Fifteen minutes on the phone beats reading another page.
(902) 298-0218 · Monday to Friday, 9:00 am to 5:00 pm Atlantic
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Need it faster? Call (902) 298-0218, Monday to Friday, 9:00 am to 5:00 pm Atlantic.
Not sure which route your file needs?
Describe the situation — income, credit, timing, the property. You get back an honest read on whether a broker adds anything here, and if your own bank is the better answer you will be told so. No fee either way.